EX-99 2 ex99.htm



January 14, 2005FOR IMMEDIATE RELEASE

CONTACT: Kelly Polonus, Great Southern, 1.417.895.5242
kpolonus@greatsouthernbank.com


Great Southern Bancorp, Inc. Reports Annual Earnings of $1.92 Per Share
Annual Reported Earnings Per Share Up 15.7%

Annual 2004 Financial Highlights:

    • Reported earnings per diluted share increase 16% over prior year quarter
    • Net interest income rises 14% over prior year
    • Revenue from commissions and service charges increases 20% over prior year
    • Non-performing assets decline 60% from December 31, 2003
    • Loans increase 18% from December 31, 2003

Fourth Quarter 2004 Financial Highlights:

    • Reported earnings per diluted share increase 20% over prior year quarter
    • Net interest income rises 12% over prior year quarter
    • Revenue from commissions and service charges increases 14% over prior year quarter
    • Non-performing assets decline 21% from September 30, 2004
    • Loans increase 2% from September 30, 2004

Springfield, Mo. -- Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great Southern Bank, today reported preliminary earnings for the quarter ended December 31, 2004, were $.49 per diluted share ($6,828,000) compared to the $.41 per diluted share ($5,631,000) the company earned during the same quarter in the prior year. Excluding significant non-operating items (which are discussed below), operating earnings per diluted share for the quarters ended December 31, 2004 and 2003, were $.49 and $.40, respectively.

For the year ended December 31, 2004, preliminary earnings were $1.92 per diluted share ($26,880,000) compared to the $1.66 per diluted share ($23,091,000) the company reported during the year ended December 31, 2003. On an operating basis, earnings per diluted share were $1.92 for the year ended December 31, 2004, compared to earnings per diluted share of $1.62 for the year ended December 31, 2003, an increase of 18.5%.

"Great Southern's results in the fourth quarter and the full year underscore our commitment to build winning relationships with our customers," said Great Southern President and CEO Joseph W. Turner. "Our fourth quarter reported earnings were up 20% over the prior year quarter and full year reported earnings were up 16% over last year. Loan demand in the region was strong, particularly in commercial real estate and construction lending, culminating in 18% loan growth for the full year. This growth generated an increase of $7.5 million in net interest income, our strongest driver in earnings growth. In addition, commissions and service charges were up $3.4 million for the year."

For the three months ended December 31, 2004, return on average equity was 19.60%; return on average assets was 1.49%; and net interest margin was 3.70%. For the year ended December 31, 2004, return on average equity was 20.58%; return on average assets was 1.58%; and net interest margin was 3.77%.

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There were no significant non-operating items during the quarter ended December 31, 2004. By comparison, one significant non-operating item occurred during the quarter ended December 31, 2003. Non-interest income during the quarter ended December 31, 2003, was positively impacted by a net pre-tax gain of $210,000 on the sale of available-for-sale debt and equity securities.

Quarter Ended December 31,
2004
 2003
Dollars Earnings Dollars Earnings
(000)
 Per Share
 (000)
 Per Share
Reported Earnings $6,828  $.49  $5,631  $.41 
 
Less: Net gain on sales of
  securities (net of taxes) -- 
 -- 
 (141)
 (.01)
 
Operating Earnings $6,828 
 $.49 
 $5,490 
 $.40 
 
Year Ended December 31,
2004
 2003
Dollars Earnings Dollars Earnings
(000)
 Per Share
 (000)
 Per Share
Reported Earnings $26,880  $1.92  $23,091  $1.66 
 
Add: Net loss (gain) on sales
of securities (net of taxes) 236  .02  (533) (.04)
 
Less: Gain on sale of land
(net of taxes) (257)
 (.02)
 -- 
 -- 
Operating Earnings $26,859 
 $1.92 
 $22,558 
 $1.62 

In previous years, the net interest margin benefited from a portion of the company's loan portfolio having interest rate floors. As market rates of interest dropped, these interest rate floors kept the rates on these loans from dropping once the floor was reached, while the company's funding costs continued to move with market interest rates. Throughout 2004, as interest rates have begun to increase, the company's funding costs have increased along with market interest rates. However, interest rates on loans with rate floors will not increase until rate floor thresholds have been reached. As a result, the net interest margin has compressed because rates on some of these assets have not increased in a manner correspondent with rates on liabilities. Many of these interest rate floors have now been reached, therefore future market rate increases should result in more proportionate loan rate increases on these particular loans.

The company recorded additional compensation expense during the quarter ended December 31, 2004, of $296,000 ($.02 per share) as a result of stock option exercises by employees followed by the repurchase of these shares by the company. This item did not impact total stockholders' equity. The company does not expect this expense to be recurring in future periods.

Non-performing assets at December 31, 2004, were $6.5 million, down $9.9 million from December 31, 2003. Non-performings as a percentage of total assets were .35% at December 31, 2004, compared to 1.07% at December 31, 2003. Compared to December 31, 2003, non-performing loans decreased $2.9 million to $4.5 million while foreclosed assets decreased $7.0 million to $2.0 million.

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The decrease in non-performing loans was primarily due to the repayment of the remaining balance of the largest non-performing relationship, as well as principal payments on other non-performing relationships. In addition, the transfer of one $504,000 relationship to foreclosed assets in the first quarter of 2004 was subsequently transferred to fixed assets and was opened as a branch in December 2004. Compared to September 30, 2004, non-performing loans decreased $1.5 million.

As a result of continued growth in the loan portfolio, changes in economic and market conditions that occur from time to time, and other factors specific to a borrower circumstances, the level of non-performing assets will fluctuate. At December 31, 2004, non-performing assets were at relatively low levels.

The decrease in foreclosed assets was primarily related to the sale of one asset relationship totaling $6.0 million in the first quarter of 2004. This relationship was most recently discussed as foreclosed assets in the December 31, 2003, Annual Report on Form 10-K, and involved condominium buildings and lots, single-family residences and lots, a golf course, and other developed and undeveloped land. Great Southern recognized no additional loss upon the sale of these assets. No significant foreclosed asset additions or sales occurred in the three months ended December 31, 2004.

Stockholders' equity at December 31, 2004, was $139.2 million (7.5% of total assets), equivalent to a book value of $10.16 per share.

The stock of Great Southern Bancorp, Inc., is quoted on the Nasdaq National Market System under the symbol "GSBC". The last sale of GSBC stock in the quarter ended December 31, 2004, was $35.00.

Great Southern offers a broad range of banking, investment, insurance and travel services to customers and clients. Headquartered in Springfield, Missouri, Great Southern operates 31 branches and more than 150 ATMs throughout southwest and central Missouri. The company also serves lending needs in metropolitan Kansas City through its Overland Park, Kansas, loan production office and in the Northwest Arkansas region through its loan production office in Rogers, Arkansas.

www.greatsouthernbank.com

When used in this press release the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including, among other things, changes in economic conditions in the company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans and deposits in the company's market area and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The company wishes to advise readers that the factors listed above could affect the company's financial performance and could cause the company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The company does not undertake-and specifically declines any obligation- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

The following tables set forth certain selected consolidated financial information of the company at and for the periods indicated. Financial data for all periods is unaudited. In the opinion of management, all adjustments, which consist only of normal recurring accruals, necessary for a fair presentation of the results for and at such unaudited periods have been included. The results of operations and other data for the three months and twelve months ended December 31, 2004 and 2003 are not necessarily indicative of the results of operations which may be expected for any future period.

Selected Financial Condition Data: December 31,
2004
 December 31,
2003
  
    (Dollars in thousands)  
  Total assets $1,846,239 $1,540,723  
  Loans receivable, gross 1,310,932 1,115,041  
  Allowance for loan losses 23,489 20,844  
  Foreclosed assets, net 2,035 9,034  
  Available-for-sale securities, at fair value 355,104 259,600  
  Held-to-maturity securities, at amortized cost 48,610 53,944  
  Deposits 1,295,398 1,137,427  
  Total borrowings 401,091 276,584  
  Stockholders' equity 139,187 119,548  
  Non-performing assets 6,514 16,425  
    Three Months Ended
December 31,		 Twelve Months Ended
December 31,		 Three Months Ended
September 30,
    2004
 2003
 2004
 2003
 2004
Selected Operating Data: (Dollars in thousands)
  Interest income $24,226 $19,742 $87,059 $76,179 $22,484           
  Interest expense 8,255
 5,509
 26,477
 23,164
 6,845           
  Net interest income 15,971 14,233 60,582 53,015 15,639           
  Provision for loan losses 1,200 1,200 4,800 4,800 1,200           
  Non-interest income 5,921 5,385 23,292 21,991 5,807           
  Non-interest expense 10,661 10,086 39,261 35,753 9,692           
  Provision for income taxes 3,203
 2,701
 12,933
 11,362
 3,385           
  Net income $6,828
 $5,631
 $26,880
 $23,091
 $7,169           
Per Common Share:      
  Net income (fully diluted) $  .49   $  .41   $1.92   $1.66   $  .51             
  Book value $10.16   $8.72   $10.16   $8.72   $9.87             
Earnings Performance Ratios:      
  Annualized return on average assets 1.49% 1.50% 1.58% 1.61% 1.63%           
  Annualized return on average stockholders' equity 19.60% 18.92% 20.58% 20.29% 21.72%           
  Net interest margin 3.70% 4.00% 3.77% 3.89% 3.78%           
  Average interest rate spread 3.45% 3.80% 3.57% 3.68% 3.57%           
  Adjusted efficiency ratio (excl. foreclosed assets) 48.31% 47.29% 46.23% 44.96% 44.53%           
  Non-interest expense to average total assets 2.31% 2.47% 2.27% 2.34% 2.17%           
Asset Quality Ratios:      
  Allowance for loan losses to period-end loans 1.79% 1.87% 1.79% 1.87% 1.76%           
  Non-performing assets to period-end assets .35% 1.07% .35% 1.07% .46%           
  Non-performing loans to period-end loans .34% .66% .34% .66% .47%           
  Annualized net charge-offs to average loans .10% .43% .18% .50% .18%           

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except number of shares)

December 31, December 31,
2004
 2003
(Unaudited)
ASSETS
Cash $    91,847 $    67,694 
Interest-bearing deposits in other financial institutions 1,364
 7,120 
        Cash and cash equivalents 93,211 74,814 
Available-for-sale securities 355,104 259,600 
Held-to-maturity securities 48,610 53,944 
Mortgage loans held for sale 671 1,243 
Loans receivable, net of allowance for loan losses of
   $23,489 - December 2004; $20,844 - December 2003 1,286,772 1,092,954 
Interest receivable 8,056 6,938 
Prepaid expenses and other assets 8,449 7,689 
Foreclosed assets held for sale, net 2,035 9,034 
Premises and equipment, net 23,353 19,892 
Investment in Federal Home Loan Bank stock 14,438 11,785 
Refundable income taxes 504 -- 
Deferred income taxes 5,036
 2,830 
        Total Assets $ 1,846,239
 $ 1,540,723 
            LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 1,295,398 $ 1,137,427 
Federal Home Loan Bank advances 231,486 204,787 
Short-term borrowings 151,591 53,534 
Subordinated debentures issued to capital trust 18,014 18,263 
Accrued interest payable 2,195 1,679 
Advances from borrowers for taxes and insurance 272 202 
Accounts payable and accrued expenses 8,096 3,944 
Income taxes payable --
 1,339 
        Total Liabilities 1,707,052
 1,421,175 
Stockholders' Equity:
Capital stock
  Serial preferred stock, $.01 par value;
    authorized 1,000,000 shares; none issued -- -- 
  Common stock, $.01 par value; authorized 20,000,000 shares; issued and
    outstanding December 2004 - 13,698,508 shares; issued December 2003 -
    12,325,002 shares 137 123 
Additional paid-in capital 17,816 17,451 
Retained earnings 122,120 164,159 
Accumulated other comprehensive income:
  Unrealized loss on available-for-sale securities,
  net of income taxes (886)
 (65)
139,187 181,668 
Less treasury common stock, at cost; December 2003 - 5,473,649 shares --
 62,120 
        Total Stockholders' Equity 139,187
 119,548 
        Total Liabilities and Stockholders' Equity $ 1,846,239
 $ 1,540,723 

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)

THREE MONTHS ENDED TWELVE MONTHS ENDED
December 31, December 31,
2004
 2003
 2004
 2003
(Unaudited) (Unaudited)
INTEREST INCOME
  Loans $  19,735 $ 16,212 $  71,112 $ 63,283
  Investment securities and other 4,491 
 3,530
 15,947 
 12,896
    TOTAL INTEREST INCOME 24,226 
 19,742
 87,059 
 76,179
INTEREST EXPENSE
  Deposits 5,456  3,924 18,196  16,582
  Federal Home Loan Bank advances 1,935  1,298 6,091  5,400
  Short-term borrowings and subordinated debentures issued
    to capital trust 864 
 287
 2,190 
 1,182
    TOTAL INTEREST EXPENSE 8,255 
 5,509
 26,477 
 23,164
NET INTEREST INCOME 15,971  14,233 60,582  53,015
PROVISION FOR LOAN LOSSES 1,200 
 1,200
 4,800 
 4,800
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 14,771 
 13,033
 55,782 
 48,215
NONINTEREST INCOME
  Commissions 1,941  1,496 7,793  5,859
  Service charges and ATM fees 3,205  3,037 12,726  11,214
  Net realized gains on loan sales 204  273 992  2,187 
  Net realized gains (losses) on available-for-sale securities (1) 210 (373) 795
  Net gain (loss) on sales of fixed assets (23) (8) 403  161
  Other income 595 
 377
 1,751 
 1,775
    TOTAL NONINTEREST INCOME 5,921 
 5,385
 23,292  
 21,991
NONINTEREST EXPENSE
  Salaries and employee benefits 6,164  5,024 22,007  18,739
  Net occupancy and equipment expense 2,049  1,685 7,247  6,335
  Postage 458  444 1,784  1,691
  Insurance 210  192 761  683
  Advertising 221  233 794  735
  Office supplies and printing 193  198 811  855
  Telephone 229  228 903  797
  Legal, audit and other professional fees 211  374 1,309  1,078
  Expense on foreclosed assets 85  812 485  1,939
  Other operating expenses 841 
 896
 3,160 
 2,901
    TOTAL NONINTEREST EXPENSE 10,661 
 10,086
 39,261 
 35,753
INCOME BEFORE INCOME TAXES 10,031  8,332 39,813  34,453
PROVISION FOR INCOME TAXES 3,203 
 2,701
 12,933 
 11,362
NET INCOME $  6,828 
 $  5,631
 $ 26,880 
 $ 23,091
BASIC EARNINGS PER COMMON SHARE $.50 
 $.41
 $1.96 
 $1.68
DILUTED EARNINGS PER COMMON SHARE $.49 
 $.41
 $1.92 
 $1.66
DIVIDENDS DECLARED PER COMMON SHARE $.12 
 $.10
 $.44 
 $.36